The BIG BEAUTIFUL BILL is over 1,000 pages\u2026.<\/p>\n\n\n\n
Here is some info on a couple provisions in the Big Beautiful Bill<\/p>\n\n\n\n
No Tax on Tips:<\/strong><\/p>\n\n\n\n Effective Tax Years 2025 \u2013 2028<\/p>\n\n\n\n The first $25,000 of tips are tax deductible. Taxes are still taken out of employees pay so it doesn\u2019t affect paychecks. The tax benefit comes into play during tax time. When the employee does their taxes they can deduct up to $25,000 of their tips from their total income which will lower their taxable income.<\/p>\n\n\n\n Individuals with income under $150, 000 or $300,000 married filing jointly qualify for the tax deduction<\/p>\n\n\n\n $25,000 is exempt only from FEDERAL income tax\u2026..it is not exempt from FICA or State Income Tax<\/p>\n\n\n\n This is an \u201cAbove The Line\u201d deduction (like student loan interest, IRA Contributions, Self-Employed Health Insurance, etc) so the tax savings varies based on taxpayers tax rate.<\/p>\n\n\n\n Not Tax on Overtime:<\/strong><\/p>\n\n\n\n Effective Tax Years 2025-2028<\/p>\n\n\n\n Up to $12,500 overtime pay is tax deductible. Taxes are still taken out of employees pay so it doesn\u2019t affect paychecks. The tax benefit comes into play during tax time. When the employee does their taxes, they can deduct up to $12,500 of overtime pay from their total income which will lower their taxable income. For MFJ, if both spouses have overtime pay, then a maximum of $25,000 can be deducted from income.<\/p>\n\n\n\n Individuals with income under $150, 000 or $300,000 married filing jointly qualify for the tax deduction<\/p>\n\n\n\n $12,500 is exempt only from FEDERAL income tax\u2026..it is not exempt from FICA or State Income Tax<\/p>\n\n\n\n This is an \u201cAbove The Line\u201d deduction (like student loan interest, IRA Contributions, Self-Employed Health Insurance, etc) so the tax savings varies based on taxpayers tax rate.<\/p>\n\n\n\n No Tax on Social Security:<\/strong><\/p>\n\n\n\n Effective Tax Years 2025 \u2013 2028<\/p>\n\n\n\n This isn\u2019t so much a \u201cno tax\u201d, but more of an extra \u201cstandard deduction\u201d. Individuals over age 65 get $6000 deduction. For Married Filing Joint, if both spouses are over 65, then the deduction is $12,000. Seniors get this extra deduction regardless of whether they take standard deduction or itemize their deductions. Basically for seniors it is standard deduction (or itemized deductions) PLUS $6,000 (or $12,000 for mfj).The tax benefit comes into play as it lowers federal taxable income<\/p>\n\n\n\n Phases out for income over $75,000 or $150,000 Married Filing Joint<\/p>\n\n\n\n This deduction only applies to FEDERAL income tax, state income taxes still apply based on each state\u2019s tax laws<\/p>\n\n\n\n SALT (State & Local Tax \u2013 Itemized Deduction)<\/strong><\/p>\n\n\n\n Effective Tax Years 2025 – 2028<\/p>\n\n\n\n Increases from $10,000 to $40,000. After 2025, a 1% increase for inflation<\/p>\n\n\n\n In 2029 it reverts to $10,000<\/p>\n\n\n\n